The Bank of Ghana (BoG) has projected a decline in cocoa prices between January and March this year relative to the same period last year.

The central bank said cocoa beans exports to the international market from Ghana and West Africa, in general, would also be lower than what pertained in the same period last year.

It attributed the projected fall in cocoa arrivals and prices to fears that the global economy would be weakened by the third wave of the COVID-19.

The bank’s projection, which was contained in its January 2022 Monetary Policy Report, raises concerns that the country could be on its way to suffering its first revenue decline from cocoa in three years this year.

The third-largest foreign exchange earner, revenue from the ‘golden pod’ has been on an upward trajectory since 2019. It ended 2019 at US$2.28 billion but rose to US$2.33 billion in 2020 before peaking at US$ 2.85 billion last year, according to BoG data.

The amounts grossed from the crop were as a result of favourable prices and quantities produced.

Omicron variant

The central bank’s report, published on February 15 by its Research Department, examined the revenue prospects of the country’s three major foreign exchange-earners – cocoa, crude oil and gold.

West Africa, mainly Ghana and Cote d’Ivoire, supply about 70 percent of the world’s cocoa, with Ghana’s being of premium quality.

The report said cocoa beans arrivals from West Africa’s major cocoa producers had remained below last year’s numbers.

It said the 2021/22 crop season arrivals “may remain below expectations, thereby lending support to cocoa futures prices in upcoming months.”

The report noted that the new Omicron variant had raised concerns about a possible slowdown in global economic growth, with the concerns feeding into prices.

“These fears about weakening global economic activity might weigh on cocoa futures in the months ahead. Nearby cocoa futures prices in January to March are forecast to average US$2,435 and US$2,510 a tonne compared with US$2,549 a year earlier,” the report said.

Record output

Ghana’s cocoa production hit a record high last year when it closed the 2020/21 season at 1.045 million tonnes. That amount was about 20 percent of the season’s global supplies.

In the 2021/22 season, the Ghana Cocoa Board (COCOBOD) aims to produce about 850,000 tonnes.

Oil prices

Regarding crude oil, of which the country is a net exporter, the report said the global oil market would be subject to significant uncertainties this year.

It said the notable developments that would affect the price of the commodity included the resurgence of the COVID-19 pandemic and its effects on economic growth, oil demand, and the production decisions of the Organisation of Petroleum Exporting Countries (OPEC+).

It noted that restrictions imposed to mitigate the spread of COVID-19 before the emergence of the Omicron variant raised the possibility of a decline in global oil consumption, leading to downward pressures on oil prices.

“These factors, among others, could keep oil prices volatile between US$71 and US$79 per barrel during the year,” the report said.


On gold, the central bank said the yellow metal would “be particularly relevant for investors in 2022 as a risk hedge.”

“In the outlook, the bullion may be confronted with two key headwinds: high nominal interest rates and a potentially stronger dollar in 2022,” it said.

The report explained that those negative effects could be offset by some supporting factors such as high inflation, market volatility related to COVID-19, geopolitics, and robust demand from central banks and jewellery consumers.

“Bullion’s performance will be dependent on which factors outpace the other. Gold prices are expected to trade between US$1,500 and US$1,850 per fine ounce,” the report added.